Supermarket Income REIT PLC (LON:SUPR) has announced the exchange of contracts for the acquisition of a Sainsbury's supermarket in Melksham, Wiltshire, and a Waitrose supermarket in Winchester, Hampshire, from LaSalle Investment Management for £64.8mln, representing a combined net initial yield of 4.4%.
The real estate investment trust, which provides secure, inflation-protected, long income from grocery property in the UK, said the acquisitions are expected to complete in the coming weeks upon the completion of property-related due diligence.
The Sainsbury's store was developed in the 1990's and subsequently extended and refurbished in 2011. The 9-acre site comprises a 47,000 square foot net sales area supermarket, an 8-pump petrol filling station, 290 parking spaces and purpose-built online fulfilment distribution docks, which support Sainsbury's online grocery deliveries across the region. It is being acquired with an unexpired lease term of 17 years, with annual, upwards only, RPI-linked rent reviews (subject to a 4.0% cap and a 1.0% floor).
The Waitrose site was developed in 2009 and comprises a 25,500 square foot net sales area omnichannel supermarket with 180 parking spaces. In addition, 4 residential apartments, a GP medical centre and 4 ancillary units are also included in the purchase. The Waitrose store has been acquired with an unexpired lease term of 24 years, with 5-yearly, upward only, RPI-linked rent reviews (subject to a 3.3% cap and a 1.0% floor).
In a statement, Ben Green, director of Atrato Capital, the Investment Adviser to Supermarket Income REIT, said: "These two supermarkets are excellent additions to our portfolio. The lease lengths at 17 years and 24 years respectively are accretive to our portfolio WAULT of 16 years, whilst adding another Waitrose store brings further tenant diversification to the portfolio."
After the close on Friday, Supermarket Income REIT announced that it had arranged a new revolving credit facility (RCF) of £80.0mln with Barclays and Royal Bank of Canada.
The secured, interest-only RCF, has a 5 year term (comprising an initial three-year term and two further one-year extension options) and a margin of 150 basis points over SONIA, representing a total cost of debt of 1.55%. The RCF also includes a £70mln uncommitted accordion option which is exercisable at any time over the term of the facility.
Ben Green commented then: "The new RCF facility, secured with two new lenders to Supermarket Income REIT, Barclays and Royal Bank of Canada, provides us with further diversification of competitively priced funding to support the Company's growth."